AMCON Reports 2nd Quarter.Business Editors OMAHA Omaha, city, United States Omaha (ō`məhä, –hô), city (1990 pop. 335,795), seat of Douglas co., E Nebr., on the west bank of the Missouri River; inc. 1857. , Neb.--(BUSINESS WIRE)--May 12, 2003 AMCON Distributing Company (AMEX AMEX See: American Stock Exchange :DIT), an Omaha, NE based consumer products company, announced today that it incurred a net loss for the second quarter ended March 2003 of $273,786 or $0.09 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share compared with a net income of $90,435 or $0.03 per diluted share for the second quarter of the prior year. Sales for the second quarter were $177.0 million compared to $194.2 million for the same period in the prior year. For the six months ended March 2003, AMCON reported net income of $1,187 compared to $481,078 or $0.16 per diluted share for the first six months of the prior year. Sales for the six months ended March 2003 were $374.7 million compared to $404.3 million for the same period of the prior year. William William, crown prince of Germany William or Frederick William, 1882–1951, crown prince of Germany, son of William II. In World War I he commanded (1914) an army on the Western Front and was nominal commander in the German attack F. Wright, Chairman of AMCON, stated that "Sales declined in our wholesale distribution business during the second quarter due to a deflationary de·fla·tion n. 1. The act of deflating or the condition of being deflated. 2. A persistent decrease in the level of consumer prices or a persistent increase in the purchasing power of money because of a reduction in available trend in cigarette prices for certain national brands and a decline in cigarette carton volume of approximately 10.7%. Carton volume declined primarily due to the loss of one key customer that was acquired and several smaller customers due to competitive pricing strategies There are many ways in which the price of a product can be determined. The following are the foremost strategies that businesses are likely to use. Competition-based pricing Setting the price based upon prices of the similar competitor products. , as well as, cigarette consumers' continued shift of their buying habits toward value-priced brands for which the Company's market share is limited. The change in earnings for the quarter was limited to approximately $364,000 after taxes as we have been able to control our operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , in spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite greatly increased professional fees associated with SEC and Sarbanes-Oxley Act See SOX. compliance and in spite of an unfavorable LIFO (Last In-First Out) A queueing method in which the next item to be retrieved is the item most recently placed in the queue. Contrast with FIFO. LIFO - stack adjustment of approximately $400,000, as compared to the prior year. At the same time, overall cash flow from operating activities exceeded $12 million for the current six month period and our debt-to-equity ratio debt-to-equity ratio The relationship between long-term funds provided by creditors and funds provided by owners. A firm's debt-to-equity ratio is calculated by dividing long-term debt by owners' equity. Both items are shown on the balance sheet. continues to improve. With our operating line usage at approximately 53% of availability and variable interest costs at slightly over 4%, we recently locked in interest costs for approximately one-half of our credit line usage for the next several years to keep those costs fixed below 5%. Results in our retail health food segment show strong improvement over the prior year. Although this business has not yet achieved profitability, it is generating significant positive cash flows. We are encouraged by the performance of this segment and are actively planning expansion into new markets and with existing locations. We believe that this approach will allow us to increase our sales volume and more effectively allocate To reserve a resource such as memory or disk. See memory allocation. existing management overhead expenses." Wright added, "Our beverage division which includes Hawaiian Hawaiian, member of the Polynesian group of the Austronesian family of languages. Of the fewer than 10,000 people who speak Hawaiian, only a few hundred are native speakers, but the language is taught in some Hawaiian schools and remains important as a symbol of Natural Water Company, purchased in December 2001, and The Beverage Group, which began operations in December 2002, is still in the start-up Start-up The earliest stage of a new business venture. phase. We are focusing our efforts on development of the U.S. mainland and Japanese markets for Hawaiian Springs(R) natural water products and the distribution of other non-owned premium beverages in the U.S. Our new plant is now complete and an expanded warehouse and packaging facility is currently under construction in Hawaii. Additionally, we are finalizing distribution arrangements with brokers to expand our marketing efforts for proprietary beverage products in which we hold exclusive license arrangements. We are also continuing to look for expansion possibilities in this segment. We have recently added a line of coffee-based beverages from Hawaii Coffee Company, producers of Royal Kona(R) brand coffee and Hawaii's largest coffee company, and a line of natural and organic fruit drinks produced by Bottle Green Drinks in Canada under the Presse and other labels. These new beverages add to our existing beverage products which include Hype Energy Hype Energy is an energy drink sold in the U.S., Canada, and some 22 more countries around the world. Hype Energy currently comes in four varieties: Hype Energy Drink (silver and blue can), Hype Lite (white can), Hype Energy MFP (black carbon fiber can) and Hype Gold Drink(R) and Xterra(R), a line of sports beverages and energy bars. As planned, the beverage business is expected to incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. losses through the remainder of the fiscal year as we build market share for our products. However, we continue to be excited about the opportunities that the beverage business presents." AMCON is a leading wholesale distributor of consumer products including beverages, candy candy: see confectionery. candy Sweet sugar- or chocolate-based confection. The Egyptians made candy from honey (combined with figs, dates, nuts, and spices), sugar being unknown. , tobacco, groceries gro·cer·y n. pl. gro·cer·ies 1. A store selling foodstuffs and various household supplies. 2. groceries Commodities sold by a grocer. , food service, frozen and chilled foods Chilled foods are prepared foods stored at refrigeration temperatures (at or below 8°C). They have been available in the United Kingdom and many other industrialised countries since the 1960s. , and health and beauty care products with distribution centers in Illinois Illinois, river, United States Illinois, river, 273 mi (439 km) long, formed by the confluence of the Des Plaines and Kankakee rivers, NE Ill., and flowing SW to the Mississippi at Grafton, Ill. It is an important commercial and recreational waterway. , Missouri Missouri, state, United States Missouri (mĭz  r`ē, –ə), one of the midwestern states of the United States. , Nebraska, North Dakota North Dakota, state in the N central United States. It is bordered by Minnesota, across the Red River of the North (E), South Dakota (S), Montana (W), and the Canadian provinces of Saskatchewan and Manitoba (N). , South Dakota South Dakota (dəkō`tə), state in the N central United States. It is bordered by North Dakota (N), Minnesota and Iowa (E), Nebraska (S), and Wyoming and Montana (W). and
Wyoming. Chamberlin's Natural Foods, Inc. and Health Food
Associates, Inc., both wholly-owned subsidiaries of The Healthy Edge,
Inc. (formerly Food For Health Co., Inc.), operate health and natural
product retail stores in central Florida
Central Florida is the central region of the United States state of Florida, on the East Coast. (7), Kansas, Missouri, Nebraska and Oklahoma (3). The retail stores operate under the names Chamberlin's Market & Cafe and Akin's Natural Foods Market. Hawaiian Natural Water Company, Inc., which was acquired in December of 2001, produces and sells natural spring water under the Hawaiian Springs label. The water is bottled at the source on the Big Island of Hawaii. The Beverage Group, Inc. markets and distributes Hawaiian Springs and other premium beverage products in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Canada and Mexico. This news release contains forward looking statements that are subject to risks and uncertainties and which reflect management's current beliefs and estimates of future economic circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or , industry conditions, Company performance and financial results. A number of factors could affect the future results of the Company and could cause those results to differ materially from those expressed in the Company's forward looking statements. Moreover, past financial performance should not be considered a reliable indicator of future performance. Accordingly, the Company claims the protection of the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. for forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. contained in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 with respect to all such forward-looking statements. Visit AMCON Distributing Company's web site at: www.amcon.com
AMCON Distributing Company and Subsidiaries
Condensed Consolidated Balance Sheets
March 2003 and September 2002
----------------------------------------------------------------------
(Unaudited)
March 2003 Sept. 2002
----------- ------------
ASSETS
Current assets:
Cash $ 652,312 $ 130,091
Accounts receivable, less allowance for
doubtful accounts of $0.6 million and
$0.6 million,
respectively 25,050,562 31,216,783
Inventories 25,636,257 35,744,074
Income tax receivable 1,005,955 981,054
Deferred income taxes 324,370 324,369
Other 601,655 393,365
----------- ------------
Total current assets 53,271,111 68,789,736
Fixed assets, net 16,418,192 16,096,124
Available-for-sale investments 626,020 562,000
Deferred income taxes 152,021 -
Goodwill 6,091,402 6,091,402
Other intangible assets 11,635,574 11,804,284
Other assets 1,408,097 1,242,923
----------- ------------
$89,602,417 $104,586,469
=========== ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $15,849,490 $ 19,873,851
Accrued expenses 3,108,359 3,969,164
Accrued wages, salaries, bonuses 944,025 1,371,310
Current liabilities of discontinued
operations 115,940 93,558
Current portion of long-term debt 7,303,730 14,783,967
Current portion of subordinated debt 1,702,139 1,708,986
----------- ------------
Total current liabilities 29,023,683 41,800,836
----------- ------------
Deferred income taxes 969,843 788,316
Non-current liabilities of discontinued
operations 179,025 197,024
Long-term debt, less current portion 34,095,643 36,362,099
Subordinated debt, less current portion 8,745,734 8,738,886
Commitments and contingencies
Shareholders' equity:
Preferred stock, $.01 par value,
1,000,000 shares authorized, none
outstanding - -
Common stock, $.01 par value, 15,000,000
shares authorized, 3,168,961 and
3,156,962
issued, respectively 31,690 31,570
Additional paid-in capital 5,998,007 5,977,643
Accumulated other comprehensive income,
net of tax of $0.2 million and $0.2
million, respectively 342,912 294,771
Retained earnings 10,215,880 10,395,324
----------- ------------
Total shareholders' equity 16,588,489 16,699,308
----------- ------------
$89,602,417 $104,586,469
=========== ============
AMCON Distributing Company and Subsidiaries
Condensed Consolidated Statements of Operations
for the three and six-month periods ended March 2003 and 2002
(Unaudited)
----------------------------------------------------------------------
For the three months For the six months
ended March ended March
------------------------- -------------------------
2003 2002 2003 2002
------------ ------------ ------------ ------------
Sales (including
excise taxes of
$38.9 million,
$38.4 million,
$80.6 million
and $76.8
million,
respectively) $177,008,943 $194,159,299 $374,729,829 $404,313,146
Cost of sales 163,177,678 179,928,648 347,054,689 374,972,280
------------ ------------ ------------ ------------
Gross profit 13,831,265 14,230,651 27,675,140 29,340,866
------------ ------------ ------------ ------------
Selling, general
and
administrative
expenses 12,999,003 12,555,713 25,174,706 25,113,067
Depreciation and
amortization 576,164 734,637 1,132,511 1,453,921
------------ ------------ ------------ ------------
13,575,167 13,290,350 26,307,217 26,566,988
------------ ------------ ------------ ------------
Income from
operations 256,098 940,301 1,367,923 2,773,878
------------ ------------ ------------ ------------
Other expense
(income):
Interest expense 804,219 823,160 1,647,873 1,907,258
Other (110,335) (27,813) (282,137) (74,611)
Equity in loss
of
unconsolidated
affiliate - - - 95,007
--------------------------------------- ------------
693,884 795,347 1,365,736 1,927,654
------------ ------------ ------------ ------------
Income (loss)
before income
taxes (437,786) 144,954 2,187 846,224
Income tax expense
(benefit) (164,000) 54,519 1,000 365,146
------------ ------------ ------------ ------------
Net income (loss) $ (273,786)$ 90,435 $ 1,187 $ 481,078
============ ============ ============ ============
Earnings (loss)
per share:
Basic $ (0.09)$ 0.03 $ 0.00 $ 0.16
============ ============ ============ ============
Diluted $ (0.09)$ 0.03 $ 0.00 $ 0.16
============ ============ ============ ============
Dividends per
share $ 0.03 $ 0.03 $ 0.06 $ 0.06
============ ============ ============ ============
Weighted average
shares
outstanding:
Basic 3,168,961 3,112,962 3,163,361 2,950,797
Diluted 3,168,961 3,186,858 3,227,194 3,023,067
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